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Joint (ad)ventures – family firms’ entry mode choices for emerging markets.

Löhde, A.S. and Calabro, A. and Torchia, M. and Kraus, S. (2020) 'Joint (ad)ventures – family firms’ entry mode choices for emerging markets.', International journal of entrepreneurial behavior & research. .

Abstract

Purpose – The aim of this study is to advance knowledge on family firms’ entry mode choices by examining the linkage between target market context, especially in the emerging economies of China and India, and the dominant family firm logic of keeping ownership and control in the family. Design/methodology/approach – We use an exploratory multiple case study analysis approach based on nine German family firms’ internationalization endeavors. We use both primary and secondary data. Findings – Traditionally, extant research concludes that family principals prefer foreign direct investments (FDIs) in order to exert maximum control when entering international markets. In contrast, our study finds a clear preference for international joint ventures (IJVs) as an initial entry mode of choice into unfamiliar markets. Our findings propose this decision to be rooted in cultural unfamiliarity and the complexity of the target markets’ legal environment. The effect of these two factors is amplified by prior IJVs experiences. Originality/value – This article offers several original insights. First, we identify the triggers of the paradoxical IJVs’ entry mode choice among family firms and thus explain the motivation for breaking with the dominant family firm logic of maximizing control. Second, we account for factors in China’s and India’s particular emerging market environments. In the light of family control, the unfamiliarity with these markets triggers the decision to compensate for the high level of uncertainty by engaging in an IJV partnership. Third, our study shows that family firms are indeed willing to share control if it serves the long-term survival of the firm.

Item Type:Article
Full text:(AM) Accepted Manuscript
Available under License - Creative Commons Attribution Non-commercial.
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Status:Peer-reviewed
Publisher Web site:https://doi.org/10.1108/IJEBR-10-2019-0573
Publisher statement:This article is made available under a Creative Commons Attribution Non-commercial International Licence 4.0 (CC BY-NC 4.0) and any reuse must be in accordance with the terms outlined by the licence.
Date accepted:27 March 2020
Date deposited:27 March 2020
Date of first online publication:26 May 2020
Date first made open access:03 June 2020

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